Budget Friendly Valentine’s Day Gifts

Sweet treats that won't make your wallet cry

With Valentine’s Day approaching while credit card bills from Christmas are overdue, many couples will want to show their love in a more fiscally responsible manner. Because the Beatles had it right—money can’t buy you love.

Expressing love through a gift doesn’t have to come in the form of overpriced roses and costly restaurant meals. If you’re challenged by creativity and budget, here are a few budget friendly suggestions.

Record memories. Make a calendar with photos of special memories you shared. Create a soundtrack of your life with your sweetheart and explain why you chose each song. Videotape your partner’s parents and siblings talking about their favourite childhood memories of the recipient.

Buy a used book and in the inside cover explain why you chose the book for them. Better yet, talk to his parents to find his favourite childhood stories. Is he missing his copies? Scour used bookstores and thrift stores to find his favourites and present him with a selection.

Your honey wants to know you’re paying attention to the details of their life. What little irritations could you help soothe with a small gift? Does she need extra pantyhose for her desk drawer, or would he appreciate a set of lint rollers for his office? Has she been putting off sorting her photographs into albums? Do they have a hobby or interest that lends itself to purchasing something inexpensive but fun? A reader might appreciate a few witty bookmarks; a foodie might giggle at oddly shaped cookie cutters.

If the gift of a day at a luxurious spa is out of the question, you can give a loved one the spa experience at home. Pick up bubble bath, a bath sponge and a fragrant candle, and load their music player with a relaxing playlist. Be sure to be ready for their foot massage afterwards, and get the kids out of the house to grandma’s or a neighbour’s so the ambiance isn’t ruined by screaming and hammering on the door.

Small Businesses Make Dumb Decisions

Hey small business, why don’t you want my money?

I learned so many lessons in running a business, and there’s one major rule that I see small business owners screw up on a regular basis.

Number #1 Rule in Retail: Make it easy for customers to give you their money.

Common sense, right? You’d think so. Instead, I watch small business after small business make it nearly impossible for me to spend my money with them. Here are the top two ways they make it impossible for me to give them my business.

Offer limited or unreliable hoursMany small businesses are closed evenings and Sundays. That’s fantastic for the work-life balance of the owner, but makes it nearly impossible for working parents to patronize your business. Often businesses will try evening or Sunday hours for a short time before deciding no one is shopping those days and they shouldn’t be open. Rubbish! When I first opened my store I was closed Sundays and Mondays but quickly opened seven days a week. Two years in, and I would still have Sunday customers try the door, find it open, and express surprise, asking, “When did you start being open on Sundays?”

It takes a very, very long time to establish business during added hours, but that time can be well spent building your business by tidying and stocking, reorganizing, brainstorming, planning and executing marketing strategies, networking, planning promotions, etc.

Once you’re open, don’t close randomly. My local coffee shop used to make these incredible paninis that I loved. I’d buy them once or twice a week. But the store began closing randomly. An employee was sick, manager was sick, training days, it was quiet so they closed early, etc. After three trips made and finding them closed, I stopped going. Small businesses need back-up plans. Guess which boring but reliable coffee shop put them out of business?

Too many limits on promotionsIt might be a midnight madness or friends and family event, or a one-day sale of some sort. Whatever you’re offering, I’m sure the point is to make money. Put cash in the till. Maybe find new customers and impress them, or offer a perk for regular customers.

So why do so many businesses create arbitrary rules that discourage the very thing they should be encouraging?

A local attraction we patronize sells annual passes at a steep discount for a few months of the year when they’re closed over the winter months. Once they’re open, you can’t get the same deal and it’s far more expensive. I don’t mind this promotion, as it’s offered for months, and well publicized. Plus, anyone can buy the passes at a local grocery chain, and you don’t need the people using the passes with you at the time of purchase.

Compare this to another attraction we visit. They put their passes on sale randomly, sometimes with just a day’s notice. You must be present with your children to purchase the pass. No one can buy the pass for you and you can’t buy the pass over the phone and pick it up later. Then, they limit the promotion to a single day, or even half a day.

Do you want my money, or not? Offer longer promotions. Air Miles and Safeway give customers a week to collect their bonus Air Miles, and if you can’t make it, someone else can use your card and coupon so you’re still rewarded. Let people send a friend to pick up their purchase for them. Extend the discount “under the table” for regular customers who ask because they can’t make it in.

When you make business decisions, make them with the goal in mind of bringing in cold hard cash and making loyal customers for life, not frustrating your regulars and turning away potential customers.

RRSPs versus TFSAs for Families

Which savings vehicle is right for your family?

The March 1 Registered Retirement Savings Plan (RRSP) deadline is looming—but is it the best savings vehicle for you?

An RRSP is a plan registered with the Canada Revenue Agency that holds investments. Contributions are tax-deductible, and the gains grow tax-free until you make withdrawals from the plan, at which point they are taxed at your income tax rate at the time of withdrawal.

You can contribute up to 18% of your earned income from the previous year, up to a maximum of $22,000. Adjustments may be made depending on any pension plans you have, and your carry-forward of unused RRSP contribution room since 1991.

For many years, RRSPs was the best savings program available to average Canadians. However, in 2008 the Canadian government announced Tax-Free Savings Accounts (TFSA). It’s a flexible savings plan that allows Canadians to contribute up to $5,000 a year to the account. Like RRSPs, unused room can be carried forward. Unlike RRSPs, contributions are not tax deductible.

The money within a TFSA grows tax-free, so if you invested the full $5,000 annually and your investment doubled, you could withdraw the $10,000 without paying tax on the full amount. Additionally, neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits (such as the Canada Child Tax Benefit, the GST credit, the Age Credit, and Old Age Security and Guaranteed Income Supplement benefits).

Before deciding whether to invest in an RRSP or TFSA, speak with your financial advisor. As a general rule of thumb, if you’re in a high income bracket, an RRSP may be your best bet. If you’re in a lower tax bracket or want a savings vehicle with more flexibility, the TFSA is likely your best choice. Some Canadians are choosing to invest heavily in their RRSP (sometimes with the help of a generous employer matching program) and use their tax refund to invest in a TFSA.

Want to really get into the nitty gritty of which program is better before you seek expert advice? Check out www.taxtips.ca/calculator/tfsavsrrsp.htm and play with their TFSA vs RRSP calculator.

I know you’ve heard it before, but it’s advice worth repeating. Pay yourself first. If you wait every month to see how much money you can afford to save, you likely won’t contribute anything at all. Set up automatic bank withdrawals instead. This method also takes advantage of dollar-cost-averaging. Your contribution buys fewer shares when the price is high and more when the price is low. After a period of time, your average share price will probably be lower than if you had bought in with infrequent lump sum contributions.